Four Strategies Drive High-Value Healthcare Analytics for COVID-19 Recovery
This article is based on a HAS 20 Virtual breakout presentation by John Wadsworth, MS, Senior Vice President, Client Engagement, Health Catalyst, titled, “’Bellagio Buffet’ Analytics: Necessary for COVID Recovery.”
COVID-19 is challenging existing assumptions around the business of healthcare analytics, as the demand for high-quality and timely population-level data has never been so urgent. From emergency response to a sustainable pandemic-ready future, analytics-informed decision making is a short- and long-term operational, clinical, and financial imperative.
However, established analytics practices that don’t accommodate the current dynamic state of healthcare won’t scale to meet the COVID-19 era’s fluid needs. Healthcare organizations must assess how they run their analytics teams and adopt critical system-level competencies to elevate analytic production and consumption. Health systems that meet pandemic pressures with high-value analytics will not only operate effectively in the current crisis but emerge better equipped to leverage analytics resources to improve care delivery in the long term.
COVID-19 Recovery Is Revolutionizing the Production of Healthcare Analytics
Lessons learned from the pandemic’s acute phases, emerging operational challenges, and outbreak-driven changes in revenue are placing greater value on analytics as healthcare approaches COVID-19 recovery. As a result, the pandemic is revolutionizing the way health systems run their analytic businesses.
The pandemic has driven greater recognition that an analytics business must offer operational transparency and timeliness as a key to survival. Analytics will also play a critical role in identifying new revenue streams, and analytics teams facing furloughs, layoffs, and budget cuts will establish their value by identifying and validating these new streams.
Additionally, the producers and consumers of analytics within organizations are changing. Analytics team members best equipped to survive disruptions are skilled domain operators with tech savvy knowledge-sharing capabilities. Even though any role not touching a patient directly (e.g., data scientists and engineers) is a candidate for outsourcing, organizations tend to recognize the value of people who can stitch together outcomes and finance and know the value of operations and the interplay with finance. The analytics team will thrive in the COVID-19 era by recognizing that value-creation is at the intersection of organizational branches (e.g., operations and finance, operations and clinical outcomes, and clinical outcomes and finance) and producing analytics to serve these junctures.
The Pitfall of Healthcare Analytics Business Model Assumptions
Leveraged well, analytics plays a central operational role by helping organizations generate revenue, decrease cost, and improve outcomes. However, two common mistakes thwart the value of analytics offerings:
- Underestimating the effort required to capture an opportunity: There is often a disconnect between healthcare leadership and the analytics team around understanding analytic capability to capture an opportunity for improvement.
- Overestimating analytic consumers’ capabilities: Analytics teams tend to overestimate how well non-technical team members can interpret and act on analytic insights.
The principles above fall short of optimizing analytics by assuming a high degree of technical knowledge among all team members seeking analytics. But if an organization aims to leverage data across all systems, it needs to make its data analytics process accessible to non-technical roles who need data to improve their workflows and outcomes (e.g., clinical, financial, and leadership). An effective analytics business model for the COVID-19 era considers the value of the analytics experience across the organization, regardless of technical expertise.
Four Strategies for High-Value Healthcare Analytics
To best leverage data and analytics roles through COVID-19 recovery, healthcare organizations must establish their analytics strategy’s value. A successful approach to the analytics business includes understanding the varied needs of the communities they serve (meaning the masses, not an influential few leaders) and adds value throughout the health system. To provide valuable insights, analytics producers need to understand the business of providing care and the value of analytics to their organization. According to the healthcare opportunity value continuum (Figure 1), not all analytics are equal, and not all analytics hold the same value (especially at the system level).
Figure 1: The healthcare opportunity value continuum.
The following four strategies will help health systems realize the most value from their analytics offerings:
#1: Minimize Benchmarking
At the bottom of the value continuum, benchmarking, with limited data sets, offers low visibility into needed workflow changes. Analytics teams need to minimize benchmarking. Too many health systems employ report writers who spend days hunting for data, which doesn’t improve outcomes or lower costs. By minimizing benchmarking, analytics departments free up technical resources to focus on higher-value analytics offerings (e.g., outcomes improvement). Ideally, a health system will spend less than 2 percent of its analytic budget on benchmarking.
#2: Outsource Regulatory Reporting
The next step up in value is regulatory reporting, which gives more visibility into workflow changes than benchmarking but bases measurement on decades-old evidence-based medicine. Given its low position on the value scale, regulatory reporting is a candidate for outsourcing. Partnering with companies that do regulatory reporting more efficiently than in-house teams gives health systems more capacity to invest in analytics resources, growing the analytic ability to better understand the organization. External regulatory partners can also build reusable content that many areas, including executive leadership, can leverage.
#3: Grow Risk-Based Stratification
Risk-based stratification lands high on the value continuum by providing clinically-stratified populations to maximize the payer mix (the percentage of patients with government health plans versus commercial or “private” insurance). This includes at-risk reimbursement. Analytics at the risk-based stratification level gives insight into the business drivers behind analytics requests. For example, ACO leadership needs to understand the aggregate clinical patient population to set per-member-per-month rates with payers. Health system leaders must understand the varied needs of a community to ensure care is available and affordable for the masses.
Analytics teams will fare well by growing their risk-based stratification capabilities by investing in analytic talent capable of producing risk-based analytics (e.g., team members with both technical and care delivery business savvy). Risk-based stratification is also a good area for consulting help, including hiring partners for data literacy and data-driven strategic consulting on population health, clinically integrated networks (CINs), ACOs, and new revenue streams.
#4: Find the Ideal State: Activity-Based Costing plus At-Risk Contracting
At the highest value for health systems, analytics for activity-based costing (ABC) and its associated costing transparency, coupled with the benefits of risk-based stratification, makes costing easily accessible and understandable among providers and patients. When organizations combine an ABC solution (e.g., the Health Catalyst CORUS™ Suite) with risk-based stratification, analytics achieves its highest value and drives meaningful improvement
Embracing a Mindset Shift Around Analytics
COVID-19 is influencing leadership and organizational mindset shifts around analytics, as emergency demands and changes in revenue stream drive greater reliance on analytic insights into workflow changes. To further the high-value role of analytics, organizations must understand data challenges and risks, invest in partnerships to mitigate that risk, and prioritize practices that make data widely available across organizations. In the COVID-19 recovery landscape, analytics transcends benchmarking and regulatory reporting and becomes a critical business strategy.
Would you like to learn more about this topic? Here are some articles we suggest:
- How Data Transforms the Hospital Command Center to Pandemic Proportions
- Restarting Ambulatory Care and Elective Procedures: Analytics Guide Safe, Pragmatic Decisions
- Integrated Data and Analytics Critical for COVID-19 Response and Recovery Planning
- Healthcare Trends During COVID-19: Top Five Areas to Watch
- A Sustainable Healthcare Emergency Management Framework: COVID-19 and Beyond